07/12 08:37
00:00:06 All right, good morning folks.
00:00:07 We are on record in that are Seth Kroenke v Treasure Chest LLC and Randy Elliott case number 3AN20-08622ci.
00:00:15 Parties in council are present.
00:00:17 Jury is out.
00:00:18 Jurors are all here and assembled.
00:00:21 So they're ready to go this morning.
00:00:25 Preliminary issues.
00:00:31 Mr. Bedinger, you're standing up.
00:00:33 Good morning, Your Honor.
00:00:34 Good morning.
00:00:35 I assume it's on the court's radar already, but we would ask for a ruling on the motion eliminate on abuse of process before Mr. Elliott's direct.
00:00:48 We filed three motions eliminate.
00:00:50 I believe two of them are essentially not opposed, and so I'd also like to clarify
00:00:55 that those are granted.
00:00:57 I suppose we don't necessarily need a written order, but just for the record, if we could confirm they're granted.
00:01:03 And then assuming they are, I would request that the court instruct Mr. Elliott on the limitations of his testimony beforehand so we're not stuck.
00:01:14 Let me ask this question.
00:01:16 It hasn't been raised by parties, but I am a bit concerned, Mr. Bedinger, by the timing of your motions.
00:01:22 They were filed three weeks after the court deadline for motions.
00:01:27 These are the kinds of issues that ought to have been raised well in advance of trial so that we could address them.
00:01:34 So is there any excuse, or were you simply unaware of the deadline?
00:01:39 I was certainly aware of the deadline in the past and many other case I've been part of myself and opposing parties have filed motions and lemonade right up to the beginning of trial I think these issues arise as we do our final preparation the motions have been fully briefed both sides of how their full say on the issue so I think the the prejudice of
00:02:04 allowing in evidence simply because the motion wasn't filed earlier greatly outweighs the fact that the motion eliminate was filed, I think, 11 days before trial started.
00:02:20 Well, my concern, there's two concerns.
00:02:23 Mr. Bettinger, one is I appreciate that motions in limine come up with evidentiary issues that arise when the parties are discussing things like exhibits and final witness lists and the final foray as we're preparing for trial.
00:02:39 But the issues you have raised, for example, in the motion in limine concerning abuse of process damages, that's not an issue that was unknown to you in advance.
00:02:52 Part of the reason for having motion deadlines is to give the court adequate time in order to make a ruling on issues in advance of trial so you all can prepare.
00:03:00 When you're asking for something like a preclusion order, which is what you're asking for here, the court has to go through an analysis of whether or not there is a remedy which is less harsh than precluding evidence.
00:03:13 Precluding evidence is a harsh remedy, which the Supreme Court dictates is to be used sparingly.
00:03:19 But that's what you're asking me for.
00:03:21 And when you file a motion at the last minute, basically where we're in trial at the time the motion is even opposed, it limits everybody's ability to do anything other than give you an up or down ruling.
00:03:40 So in the future, honor the court's deadlines or file a request and explain why you need more time.
00:03:49 I understand.
00:03:49 I apologize for missing that deadline.
00:03:52 If I could partially address the court's concern, the issue that's currently before the court on the motion eliminate for the abuse of process damages, whether Mr. Elliott can introduce evidence that he was damaged by Mr. Kroenke's lien because he could not market or sell the property, the very first time those damages have been raised
00:04:14 was in Mr. Elliott's response to the motion to eliminate.
00:04:17 So in that sense, this issue is extremely new, and our position is that category of damages was first presented by the defense literally one day before trial.
00:04:27 Understood.
00:04:28 And you have raised a serious issue.
00:04:31 I'm not meaning to minimize the significance of the issue that you have raised, and I certainly want to hear from Mr. Elliott's counsel over
00:04:40 how they plan to proceed and what evidence he may wish to proceed with because I am concerned about prejudice since it appears that issue was raised just in the opposition brief that came in the first day of trial.
00:04:53 But I don't know that yet until I've heard from them.
00:04:56 But the reason why we hash these issues out well in advance is so that we're not doing this with a jury waiting.
00:05:02 I understand.
00:05:03 Okay.
00:05:05 Mr. Campion.
00:05:09 I don't know how to address this initially, Your Honor, but I would start by objecting to Mr. Benninger's argument that the plaintiffs weren't on notice that Mr. Elliott potentially could have damages regarding the abusive process.
00:05:22 I point to Exhibit 16, page 48.
00:05:23 This is a text message exchange between Mr. Elliott and Mr. Kroenke.
00:05:39 This is where Mr. Elliott and Mr. Kroenke are negotiating a potential sales price at the latter part of July 2020.
00:05:45 And on page 49, Mr. Kroenke writes, Like I mentioned, if you have people willing to pay you multiple millions right now, I would suggest you sign the papers.
00:05:54 And those papers are papers where Mr. Elliott guarantees to make payment to Mr. Kroenke and pledges the deed to his entire property as a guarantee for that payment.
00:06:04 So our position is before this lawsuit was even filed, Mr. Kroenke was on notice that if he filed a lien against Mr. Elliott, he was going to tie up the property and prevent Mr. Elliott from being able to sell to people that, in Mr. Kroenke's words, said, if you have people willing to pay you multiple millions right now.
00:06:21 In our initial disclosures, it was disclosed that Mr. Elliott had an offer of approximately $1 million to buy his property that was precluded by the liens.
00:06:32 The deposition that Mr. Brzezinski took of Deborah Whittam on August 14, 2023 on page 32 and 33, Ms.
00:06:40 Whittam tells Mr. Brzezinski that there was an offer from a man named Bill Eriksman who's a neighbor of Mr. Elliott's that he wanted to buy a portion of Mr. Elliott's property for $895,000 down and then like another million dollars over time.
00:06:54 I don't know if it was going to be in golden cash and that was in the context of how
00:07:00 helped Randy value the mind and so that was the context of the question so mr. Brzezinski knew mr. Kroenke knew mr. Benger knew that mr. Elliott had an offer of again eight hundred ninety five thousand dollars down and another million over time that was over almost a year ago so we object to the idea that this is new it isn't new what I explained to the court in my opposition was
00:07:21 We don't have a written offer.
00:07:22 There isn't a text message, there isn't an email, there isn't a written offer, purchase and sale agreement that Mr. Elliott received that we produced in discovery that we would rely upon.
00:07:30 What I said was we expect Mr. Elliott, possibly Mr. Widom, to testify about knowledge they had about potential offers that Mr. Elliott was either receiving or anticipating to sell his property in 2020 that were precluded by the liens that Mr. Kroenke filed in September 2020.
00:07:45 I think it's fair for Mr. Elliott to be able to testify about that.
00:07:47 If the court wants to give a limiting instruction, I don't care.
00:07:50 That's fine.
00:07:51 It'll be up to the jury to decide.
00:07:52 But he shouldn't be precluded from being able to explain to the jury what the impact of the lien has been on him.
00:08:05 Honestly at this point I mean I'm even further confused what the evidence that's coming in is going to be our our first motion eliminate on the abuse of process claim was to exclude evidence of this failed 1 million dollar purchaser and
00:08:19 because his name and his contact information is not disclosed in initial disclosures.
00:08:24 Any preliminary witness list, no final witness list, there's no evidence of this.
00:08:30 But let me stop you right there.
00:08:32 What you're saying is that he wasn't disclosed as a potential witness, but what I've just heard is that the name was disclosed in deposition testimony or otherwise, and nobody's said to me that that person is going to be a witness.
00:08:45 It's simply a question of
00:08:47 who's the person identify him and you have that information so part of the reason I'm I'm confused is we had the one motion eliminate to exclude evidence of this particular buyer
00:08:57 My understanding from the defense's response is that wasn't opposed.
00:09:02 That's also what the court stated earlier was its perception is that the two motions eliminate weren't opposed and the only one we're arguing about is whether the abuse of damages, abuse of process damages can be capped.
00:09:14 The evidence of this other buyer making an offer is hearsay if they're not coming in to say they made an offer.
00:09:22 To address the other evidence, the idea that now, right before their case in chief, the defense can point to a text message between the parties four, five years ago saying that the lien hurt them discloses that they're going to ask for damages without a trial is not how discovery disclosures work in trial.
00:09:44 We have initial disclosures.
00:09:46 that are guided by Civil Rule 26 and Subpart G say you have to itemize all the damages you're asking for.
00:09:53 There's lots of things that happen in this case, lots of things in discovery.
00:09:57 It doesn't mean that we're asking for damages on all of them.
00:10:00 For example, originally the defense said they were hurt by Mr. Kroenke asking for reimbursement of his expenses before the season expired.
00:10:10 Mr. Albert, who was in here before Mr. Campion, clarified, no, we're not asking for damages for that.
00:10:15 There's lots of evidence, and the point of the initial disclosures and the interrogatories is to narrow down what we're actually talking about at trial.
00:10:23 The defense is required in their initial disclosures to state exactly what categories of damages they're looking for and what they are.
00:10:29 They're required to supplement those as we go.
00:10:31 They're not expected to know all their damages 30 days after the case is filed when we do initial disclosures.
00:10:36 They can supplement them, and Mr. Albert did.
00:10:38 And these damages, these new ones for not being able to market or sell the property are not in those disclosures.
00:10:44 We asked again in interrogatories, please categorize and itemize and give us numbers for all your damages.
00:10:51 The defense to Mr. Albert responded, this evidence is nowhere in there.
00:10:55 We didn't ask Mr. Albert once, or excuse me, Mr. Elliott once in his two depositions about his inability to sell or market his properties because of Seth's lien because it was never disclosed as evidence.
00:11:07 Our first notice that the defense was going to ask
00:11:11 for these damages from the jury was in Mr. Campion's response one day before trial started.
00:11:17 There has to be a way to allow us to prepare the case, but with that disclosure earlier, we potentially could have talked to this million-dollar buyer.
00:11:25 We could have asked Mr. Elliott who his other buyers were.
00:11:27 We could have asked him how he intended to market the property, but he didn't.
00:11:31 We could have looked for contrary evidence.
00:11:33 Maybe Mr. Elliott says that he couldn't market the property, but he did.
00:11:37 Maybe he's lying.
00:11:38 Maybe he's not.
00:11:38 We don't know.
00:11:39 We haven't tested it.
00:11:40 We haven't explored it.
00:11:41 We haven't been given the opportunity to gather any evidence on it or to ask Mr. Elliott or anyone else involved about these issues.
00:11:47 This is a last-minute surprise, and it's not allowed in Alaskan courts.
00:11:51 Mr. Campion?
00:11:53 I don't have anything else to say here.
00:12:03 All right, so far what I've heard is certainly we've got a discovery issue here that has been raised and argued strenuously by Mr. Bedinger that initial disclosures did not identify specific damages relating to the lien claim, if I can call it that, abusive process for filing the lien.
00:12:26 They certainly weren't categorized.
00:12:28 In my review of the discovery responses, that argument appears to be well taken.
00:12:32 What I haven't heard yet is, okay, aside from the general statement that Aleen tied up the property, what damages are you seeking?
00:12:46 I mean, are you- You're directing that at me.
00:12:48 I am directing it to you.
00:12:54 I guess here's my concern.
00:12:56 Are we arguing about an issue that is a non-issue?
00:12:59 I think so.
00:13:00 Because you're not claiming specific monetary damages for the failure to, for the fact that there was a lien tying up the property.
00:13:08 If I understand the motion from Mr. Benger, what he's concerned about is Mr. Elliott getting on the stand and saying, I would have had a million dollars in the bank had you not filed the lien.
00:13:19 I don't expect that that's what, I don't expect that testimony.
00:13:22 I can, you and I can direct Mr. Elliott not to testify that way.
00:13:26 What I expect is that he will say, I had a potential buyer that pulled out of buying the property, and I never got to the point where we could finish the negotiations because of the lien.
00:13:34 That's relevant on the issue of whether or not we can prove there was an abusive process.
00:13:39 It's relevant to whether or not we potentially get a nominal damages award.
00:13:43 And it's relevant to our potential claim for punitive damages.
00:13:45 In other words, that is not economic damages.
00:13:48 And I think that's the way Mr. Bredinger framed it, was that he wanted to preclude a claim for economic damages.
00:13:54 Also believe he said he's not seeking to preclude us from arguing for nominal or punitive damages and Okay, maybe I should have started with this question instead of going down the rabbit hole that I did but I Know So do I understand correctly then that you don't disagree that what you're asking for is nominal damages and
00:14:19 which is I think what the proposed order that Mr. Bettinger submitted said you could ask for nominal damages and you want to ask for punitive damages if the jury says that it was outrageous.
00:14:31 That's right.
00:14:31 And punitive damages obviously the amount of that, that's a whole different issue that we'll have to bifurcate anyway if they get to that point.
00:14:40 Okay.
00:14:41 Mr. Bettinger, it sounds to me like the order that you submitted on the abuse of process damages, limiting them to a claim for nominal damages, is well taken and unopposed.
00:14:55 Are you hearing anything different?
00:14:59 No, I'm not.
00:15:01 My only remaining concern is that we seem to be reopening the other motion, Lemonet, about excluding evidence of this $1 million buyer, which I thought until just now was also unopposed based on our prior discussions.
00:15:16 Mr. Campion?
00:15:22 What I not oppose was maybe the court confessions this way.
00:15:28 If Mr. Elliott,
00:15:29 testifies that he had a potential buyer without disclosing the amount or the nature of the negotiation, but simply that he had a potential buyer he was aware of, that he understood withdrew any negotiation or offer as a result of the lien, I'm satisfied.
00:15:42 I don't need to talk to the jury or have Mr. Elliott talk to the jury about the amount of that offer.
00:15:48 And I understood your motion, Mr. Bedinger, to be that he couldn't testify about the million-dollar offer, most specifically the dollar amount because there was no piece of paper.
00:16:00 Or a witness who's coming in to testify.
00:16:04 Otherwise, Mr. Elliott saying, a man walked up and offered me $1 million to buy this property is hearsay.
00:16:11 In addition, the statement that he withdrew that offer because Mr. Kroenke filed a lien is hearsay if it was said, and if it wasn't said, it's speculation.
00:16:20 Okay.
00:16:21 But can't Mr. Elliott come in and testify that I was unable to market the property because of the lien.
00:16:28 I was unable to sell it because of the lien.
00:16:32 And that's not a hearsay statement.
00:16:45 That's fine, Your Honor.
00:16:47 If we want to limit the testimony to essentially the fact that this is what a lien is, this is what a lien does, I couldn't market or sell the property because of the lien without mentioning a potential buyer who came and without mentioning that any buyer decided not to buy because of the lien.
00:17:23 Mr. Campion, if I make that order, is that consistent with your understanding of what relief had been requested?
00:17:31 Yes, it is, Your Honor.
00:17:32 All right.
00:17:32 So I'll make that.
00:17:33 That's the court's order then.
00:17:35 So Mr. Elliott, your testimony is going to be limited at this point in time to talking about the fact that you could not market the property because of the lien.
00:17:46 You can't talk about a specific offer that you had and didn't come through.
00:17:53 Should I ask a question?
00:17:55 Wait.
00:18:04 Clear?
00:18:08 All right.
00:18:10 So for the record, the three motions in limine that were filed are granted consistent with the court's oral rulings here today.
00:18:25 And again, in the future, please watch those motion deadlines so that we can hash these issues out in advance.
00:18:32 I understand.
00:18:32 I apologize.
00:18:34 Can I just make one?
00:18:35 I don't think Mr. Brzezinski is going to object.
00:18:37 I ask for permission to lead Mr. Elliott through those questions, just to be careful.
00:18:41 Sure.
00:18:42 Yeah, just so, I mean, you understand why I wanted to... In the spirit of cooperation.
00:18:48 Absolutely.
00:18:49 We want to avoid mistakes and problems.
00:18:50 I think that will simplify things, so I'll grant that request.
00:18:55 Thank you.
00:18:57 Okay.
00:18:59 Any other housekeeping matters that we should address?
00:19:03 Just so it's clear, I added an exhibit to our exhibit list.
00:19:06 I shared the updated exhibit list and the additional exhibit with Mr. Brzezinski and Mr. Benger last night.
00:19:12 The clerk has a copy of the revised
00:19:15 It's an audio recording, so I don't have the thumb drive.
00:19:18 I can add it to the thumb drive at a break, so the court has it if it would like.
00:19:21 Okay.
00:19:22 Is there any objection to that exhibit?
00:19:24 Unfortunately, I'm the uncooperative one, apparently.
00:19:27 But yes, we do object to it.
00:19:30 We, of course, have our pretrial deadlines in this case to exchange exhibits, meet exhibits.
00:19:36 The meet regarding exhibits file the final exhibit list.
00:19:40 Those deadlines are at least the deadlines to produce exhibits in the meet are over a month expired.
00:19:46 We prepared our case that we've already presented and arrested based on the exhibits that were disclosed, both the defendants and our own.
00:19:54 I think it's unfairly prejudicial to add a new exhibit at this point in time.
00:20:02 To be clear, this is an exhibit.
00:20:03 It's an audio recording.
00:20:05 We disclosed it to the defendants years ago, probably four years ago.
00:20:10 It's an audio recording, my understanding, as part of a meeting between Mr. Kroenke and Mr. Elliott.
00:20:17 that audio recording wasn't part of our case in chief.
00:20:21 The only reason it's come up is through Mr. Campion's cross-examination.
00:20:26 And so the way I view it is it hasn't been presented in this case so far.
00:20:30 The only reason the jury might be curious about it is through Mr. Campion's cross-examination.
00:20:34 If it's through his cross-examination, Mr. Campion's always known he wanted this to be an exhibit at trial.
00:20:39 But it wasn't listed early.
00:20:41 It didn't give us time to prepare.
00:20:43 If we want to address it, we'd be forced to recall some or all of our witnesses, which is a large waste of time and money for everyone involved.
00:20:50 And so we do object to this late disclosure.
00:20:52 Mr. Campion?
00:20:54 So I think Mr. Binger is correct.
00:20:57 The exhibit I marked for identification is a, I don't know, 27 or 29-minute recording.
00:21:06 I've marked the
00:21:08 entire recording.
00:21:09 I don't intend to play the entire recording.
00:21:11 I intend to play 20 seconds of that recording.
00:21:14 And the reason that this came up for the first time is because Mr. Clark testified yesterday that the actual spirit of the agreement between Mr. Kroenke and Mr. Elliott was a time and materials contract.
00:21:24 Mr. Kroenke told Mr. Elliott at their surreptitiously recorded meeting on June 6th that the spirit of the agreement was to take care of Mr. Elliott.
00:21:31 He used the same words and said he was going to write off Mr. Turnbull's time to build the wash plant.
00:21:36 It didn't strike me until Mr. Clark said for the first time, and it was never disclosed before by anyone, that the spirit of their agreement was a time and materials contract.
00:21:43 That's why I added this as Exhibit I. And I think I should be able to play it.
00:21:47 There's no way I could have anticipated Mr. Clark would have said that, because it wasn't a statement that was disclosed in discovery, and it wasn't something that he said at his deposition.
00:21:55 Mr. Bedinger, let me be clear.
00:21:57 This is a recording that your client or one of his agents
00:22:03 made and you disclosed, you've had it in your possession, you've had it all along.
00:22:08 Your objection basically is it wasn't on the pretrial list.
00:22:11 Yeah, exactly.
00:22:12 Our objection is not that we haven't known about this for four years.
00:22:15 Our objection is that the defense has also known about this for four years and has decided not to notice us that they're bringing it to trial until we've rested, until they're going to do it in their case in chief.
00:22:29 Mr. Campion thought that prior testimony was contradicted by that recording.
00:22:34 That's the purpose of cross-examination.
00:22:36 It should have been used during cross so we could have redirected.
00:22:38 At this point, Mr. Campion said he only intends to introduce 20 seconds of the video.
00:22:44 We would theoretically have a right to introduce more to give it context.
00:22:49 I think there's five or six recordings total, probably hours of testimony that could potentially give this context.
00:22:57 receiving this yesterday evening we haven't had time to prepare to do it that's the purpose of our pre-trial deadlines that's why exhibits were exchanged and disclosed over a month ago so we have time to prepare our case at this point we not only don't have time we've rested
00:23:12 All right.
00:23:13 I understand your argument, Mr. Bedinger, but respectfully, it's overruled.
00:23:17 This is a recording that your client made.
00:23:19 It clearly came up in testimony yesterday.
00:23:21 It was very apparent to me that there was surprise to the defense as to what Mr. Clark said about that particular recording.
00:23:30 Frankly, that's the purpose of rebuttal.
00:23:32 It's not a document that you were unaware of.
00:23:35 You've had it in your possession.
00:23:37 You can certainly raise it in rebuttal.
00:23:38 You can call Mr. Clark back to explain it.
00:23:40 You can add more portions of the audio
00:23:43 BUT I'M GOING TO OVERROLL THE OBJECTION THAT HE CAN BE ALLOWED TO USE IT.
00:23:47 THANK YOU.
00:23:47 I UNDERSTAND.
00:23:49 TO ALLOW THE PARTIES IN THE COURT TO REFLECT ON IT, I BELIEVE BASED ON THE CROSS-EXAMINATION YESTERDAY THAT WE'LL BE ASKING FOR A JURY INSTRUCTION ON THE FACT THAT ALASKA IS A ONE-PARTY CONSENT STATE FOR RECORDING MEETINGS.
00:24:02 MY UNDERSTANDING FROM THE CROSS YESTERDAY WAS THE IMPLICATION WAS THAT IT WAS DONE SERAPTITIOUSLY AND ILLEGALLY.
00:24:10 I don't know that anybody said illegally but I'll certainly give you an instruction just propose an instruction and we'll take that up so thank you okay only other housekeeping issue is again circling back to exhibit 14 I think my ruling yesterday was clear on on that point he can certainly be asked
00:24:36 questions about the expenses he can be asked questions to lay a foundation I have not agreed to admit the document as evidence I do think it is in the nature of a demonstrative aid that could be shown to the jury in closing argument whether or not it's admissible under some other basis
00:24:56 I don't have that yet in order to make a final decision.
00:24:59 So you certainly can't show it to the jury unless and until it's admitted, but you can certainly be questioned about expenses.
00:25:06 I understand, Your Honor.
00:25:07 My only request would be that the court rule on its admissibility before Mr. Elliott is permitted to essentially read from it as if it's testimony.
00:25:20 I can't make that ruling in advance.
00:25:24 What you're basically saying is he cannot use the document for any purpose.
00:25:28 The document may well be used to refresh his memory if necessary.
00:25:33 Even under the rules for recorded recollection, he gets to read the document to the jury even if it isn't admitted as a written exhibit.
00:25:45 So to that extent, again, I'm not formally admitting the document as an exhibit, but I'm not precluding its use at this point.
00:25:52 Thank you.
00:25:54 May I ask a quick question?
00:25:55 Mr. Brzezinski?
00:25:57 Very quick, yes.
00:25:58 If the document is going to be used to refresh Mr. Elliott's recollection, which I completely agree is appropriate and I have no objection to that, I would just ask that we follow the typical format.
00:26:10 Mr. Campion asks, do you have recollection of this?
00:26:12 He says, no.
00:26:13 I understand how to do that.
00:26:14 No, I can do it.
00:26:16 I don't need to be.
00:26:17 No, no, I'm not picking on you.
00:26:18 I'm sorry.
00:26:18 I just want to make sure that
00:26:20 Mr. Elliott doesn't hold that document and then read the document through his testimony, that each time Mr. Elliott gives him the document to refresh his recollection, he comes back to it.
00:26:29 He's not holding it at the stand, which gives a completely different impression to the jury.
00:26:33 Thank you, Judge.
00:26:37 MR. Counsel, all I'm going to say at this point is parties should follow the rules, and that's what I expect you to do.
00:26:43 I will say this.
00:26:44 You have an attentive jury which has been asking penetrating questions.
00:26:48 I would very much expect that you're going to get a question about a list of expenses from Mr. Elliott.
00:26:54 But I will make rulings under the rules of evidence.
00:26:59 Thank you.
00:27:00 Thank you.
00:27:02 Okay.
00:27:04 Final issue and then I want to get the jury in here is their note from yesterday with four questions.
00:27:11 I think, Mr. Campion, you left without a copy.
00:27:14 We sent you a copy.
00:27:16 I don't think there's any issue that we need to take up at this point in advance.
00:27:21 I would simply tell the jury, as I did early on when they issued a question, that we've got questions that were posed at the end of the day.
00:27:30 Yesterday, we anticipate that some or all of those may be addressed in further evidence, but I'm not going to ask them specifically.
00:27:39 Right.
00:27:40 One housekeeping matter I have.
00:27:43 I don't have an assistant, so my request is going to be to move the podium to the well of the courtroom so that I can operate the computer and show exhibits to Mr. Elliott.
00:27:51 So I would propose and request that I conduct his examination from the podium in the well versus behind the lectern.
00:27:57 Mr. Bettinger, any objection?
00:28:00 Whatever the court prefers.
00:28:01 That's fine.
00:28:02 I would just ask that you not bring it all the way up here.
00:28:05 You can step it forward so that you're not stumbling over things, but I want to give you a chance to work it through.
00:28:13 We can put the notebooks with the original exhibits on the witness table.
00:28:18 That would be helpful as well.
00:28:19 Okay, thank you.
00:28:20 I think it would be an aid to the jury as well if they have the opportunity to look at it eventually.
00:28:32 Are you calling Mr. Elliott first?
00:28:45 Kevin is doing this for this time.
00:28:47 She says that's time and materials contract.
00:29:15 Thank you very much.
00:29:41 So let us know when you're ready to go.
00:29:42 Oh, I'm sorry.
00:29:43 Yes, Your Honor.
00:29:43 Okay.
00:29:44 Did you want to move that first now?
00:29:46 Why don't you go ahead and get it set up for me?
00:29:48 I just keep my water in there.
00:29:49 Sorry, I didn't know what you were doing.
00:29:51 Is that okay?
00:29:55 Why don't you pull it back this way?
00:29:58 All right.
00:29:59 There you go.
00:29:59 Thanks.
00:30:00 So the computer that you've got sitting up there, what's your plan with that?
00:30:03 So had walk me through what you what's on the computer that you're gonna display them up here, okay Okay
00:30:25 That's fine.
00:30:26 I went to the exam from here.
00:30:27 I'll just do the exhibits from there.
00:30:28 Okay.
00:30:29 I think that you've got enough walking room.
00:30:31 Yeah.
00:30:31 I'll just pull it back.
00:30:32 It'll be less distracting if I'm doing it from here.
00:30:35 There'll be a time when I ask to approach and play the exhibits.
00:30:39 That works.
00:30:40 And I might take that clerk's assistance to get it projected.
00:30:42 Okay.
00:30:44 We're ready.
00:30:45 We'll work it through.
00:30:46 All right.
00:30:46 We're ready for the jury?
00:30:48 Absolutely.
00:30:48 Okay.
00:30:49 Thank you.
00:31:28 Thank you.
00:31:29 Thank you.
00:32:07 Thank you for watching!
00:32:50 Good evening, everybody.
00:33:14 Please have a seat.
00:33:21 Welcome back.
00:33:23 Let me start with an apology for keeping you waiting.
00:33:25 I did tell you in advance of trial that there were times when we might have to take up a few things before we got started with evidence.
00:33:32 Today was one of those days, so thank you for your patience.
00:33:35 The second thing I wanted to mention to you, you all have been very attentive and given us some notes along the way.
00:33:42 We got another note from one of your members at the end of the day yesterday.
00:33:46 It had a series of questions on it.
00:33:48 I'm not going to read those questions.
00:33:51 directly now.
00:33:52 I do expect that the most, if not all, of those questions will be addressed through further testimony that you hear.
00:33:59 So thank you for the questions.
00:34:01 Keep them coming.
00:34:02 But I expect that we'll get answers to most of those through the rest of the proceedings.
00:34:07 So we're going to pick up today with the defense case.
00:34:10 Mr. Campion, your first witness.
00:34:11 Yes.
00:34:12 Call Randy Elliott.
00:34:13 All right.
00:34:13 Mr. Elliott, good morning.
00:34:14 You can come forward, sir.
00:34:24 RANDY ELLIOTT RANDY ELLIOTT RANDY ELLIOTT
00:34:50 At the beginning of the trial, I described the mining at Dan Creek as your life's work.
00:34:55 Would you agree?
00:34:56 I would.
00:34:56 Can you tell the jury what has encompassed your life of mining at Dan Creek?
00:35:04 You know, you hear people say they were born to do something.
00:35:06 That's just definitely it.
00:35:10 In 1981, I got out of an airplane at Dan Creek and I looked around and all I could think of is this is how it should look.
00:35:17 If you're going mining, it should be wild.
00:35:20 nobody there then the airplane flew away and we realized we didn't bring any lunch and that was how it was it's never changed but the just the thrill of going mining I can't explain it I've waited a couple years to tell this story and the feeling I have right now is that I just looked in the sluice box I found a hundred ounces of gold your heart pounds
00:35:43 And you're excited, but you're also a little bit afraid that it's brass from a bushing on something.
00:35:49 And it's not gold at all.
00:35:50 It's just repairs.
00:35:51 And that's the feeling you have out there every day.
00:35:55 Every day is a gamble.
00:35:57 But I live on that gamble.
00:35:58 I like it.
00:35:58 Can you tell the jury a little bit about your upbringing and your background?
00:36:03 It's not very complicated.
00:36:05 I graduated from high school in Golden, Colorado in 1975.
00:36:07 I went to Hawaii, did a little bit of construction work, and I went gold mining.
00:36:14 And since then, although I don't work at Dan Creek in the winter, I'm always looking for equipment or something.
00:36:23 But we had to mine out of pocket.
00:36:24 Nobody will loan you money in the gold mining business.
00:36:27 So for 30 years, we just couldn't ever get enough money together to put together a first-class operation.
00:36:34 You need an investor.
00:36:37 When and how did you acquire the claims at Dan Creek?
00:36:41 In 2010, I found an investor.
00:36:44 and he lent me the money for the down payment there had been an economic turn down there in 2008 and 2009 and the owner was now almost 80 years old I'd known him 30 years so somebody lent me the money we went mining and we had a contract for 10 years it was a little scary I had six kids no money in the bank and I had to pay $7,500 a month for 10 years all winter long no matter what
00:37:13 But I couldn't imagine, I just couldn't imagine stopping.
00:37:18 I'd already done 35 years with that.
00:37:21 The jury understands that the defendants in this case are you individually and then an organization called Treasure Chest LLC.
00:37:27 Could you tell the jury a little bit about Treasure Chest LLC?
00:37:30 I was married when I actually bought the mine.
00:37:35 And we decided that we should put the gold mine into an LLC.
00:37:39 In case I made a mistake, this would be one.
00:37:43 And she didn't want them to come and take our house and our car.
00:37:47 And I agreed with that.
00:37:49 So we put it into an LLC.
00:37:50 I don't have any idea if that really helped or not.
00:37:52 Maybe the accountants will tell me.
00:37:54 But we haven't ever had any disputes.
00:37:57 I've never been in court before in this way.
00:38:00 So I don't know if it's a waste of time or not.
00:38:02 That's why it has a name though.
00:38:04 And we called it Treasure Chest because every day it felt like that.
00:38:09 Mr. Rutherford testified yesterday that one of the things that he evaluates is whether or not a purported owner actually owns the claims.
00:38:16 Could you tell the jury whether or not you actually own the claims at Dan Creek?
00:38:19 Yeah, there are two categories of mining property.
00:38:22 You have lease property from the federal government or the state.
00:38:25 Those are claims.
00:38:27 And when someone proves that their claim is worth developing as a gold mine, they do something called a patent.
00:38:34 And all the homesteads, I mean, this property the courthouse was originally a homestead patent.
00:38:40 And then once you build on it, it becomes your property.
00:38:43 But the patent requires that you show at least $2,500 worth of improvements in 1910.
00:38:49 It was a fortune.
00:38:52 And they patented Dan Creek in 1911.
00:38:55 It was owned by three people before me.
00:38:57 It is private property, completely owned, minerals all the way to China.
00:39:01 It's a much more inclusive patent.
00:39:04 Then you would have on your house, wherever you live here in Anchorage, that would be surfaced to 25 feet, and then the state of Alaska comes in and takes the oil and whatever's under that.
00:39:13 So we have a very thorough property ownership, and it's been private since 1911.
00:39:18 We're now surrounded by National Park, and they've asserted that they can regulate us, but the Supreme Court ruled in 2019 that they don't even own the surface of Dan Creek at all.
00:39:31 So we really own it.
00:39:33 Can you describe what you own, what those patented mining claims are?
00:39:37 They start off as claims.
00:39:38 They are always a certain dimension, 650 feet by 1350 in Alaska.
00:39:43 It's about 17 acres.
00:39:45 I have, I don't even know, 20 or 30 of those.
00:39:49 We started off with 850 acres.
00:39:52 The owner split it in half so that I could mine the mining half.
00:39:55 The other half was a homestead.
00:39:57 I don't know if there's gold there.
00:39:58 We never looked.
00:40:00 And then I have sold
00:40:02 previously to my neighbors, I don't know, 200 of the 600 that were left.
00:40:09 I own about 480 acres right now.
00:40:12 When did you sell those 200 acres?
00:40:15 I couldn't tell you actually offhand since 2010, but probably at 2015, somewhere in that timeframe.
00:40:22 Is that before you met Mr. Kroenke?
00:40:24 Yes, before that.
00:40:27 This has been addressed through other witnesses, but you may be uniquely qualified to tell the jury
00:40:32 What are the challenges of gold mining at Dan Creek?
00:40:36 It isn't what you think.
00:40:37 If you watch the Gold Rush show, you know they talk about the pump failing and the cars stalling and people not showing up.
00:40:43 The biggest problem with going gold mining is there's no guarantee that you'll be paid for your work.
00:40:50 I could have brand new equipment, I could hire first class people, Seth has very good people, and take them out there and promise them the moon.
00:40:58 If there's no gold in the ground, we just don't get paid.
00:41:01 So we always live this raggedy, emotional roller coaster.
00:41:07 Every day that we go out there, even today I'm not there.
00:41:09 There's people out there that are contractors that are working.
00:41:12 I just dread the call that somebody fell down or something broke or whatever because it's always risk and it's always expensive.
00:41:20 And we don't know where we're at until the 1st of November.
00:41:22 You never know if you made any money or not.
00:41:26 I'm getting emotional thinking about it.
00:41:28 It's been too many years.
00:41:30 And when you're as old as I am, it was comforting yesterday.
00:41:33 There were two people in the room older than me.
00:41:35 I don't look it, but I'm close to 70.
00:41:38 And after all this time, I just can't do that.
00:41:42 I can't risk my children and anybody here who wants to go.
00:41:45 I can't tell you that it's going to pay.
00:41:47 And when people ask you that, that's the biggest problem.
00:41:51 The perception that if you work hard,
00:41:54 If you change the oil, if you wear the right clothes that you're going to be successful.
00:41:58 It just doesn't matter.
00:41:59 It's so risky.
00:42:03 You mentioned your age.
00:42:06 At what point did you start thinking about what has been described as an exit strategy from Dan Creek?
00:42:13 You might understand this.
00:42:14 I came here in March of 2020
00:42:17 The COVID restrictions went on the day that I arrived, March 15th.
00:42:21 So I came through the airport and didn't have to do the, you remember that?
00:42:24 This was a crazy time.
00:42:26 And traveling was almost impossible.
00:42:28 They wanted to know if you were sick when you got there and you couldn't tell for three days.
00:42:31 So you had to stay in a hotel for three days to see if you got sick.
00:42:35 Well, I got here the day that they put the restrictions on.
00:42:38 And when I went to Wasilla, my wife wouldn't let me in the house.
00:42:41 She was afraid I'd infect my children.
00:42:44 so what am I going to do I slept in my car for two days it was miserable but on the first of April I was at Walmart standing in line remember six feet apart all across the parking lot waiting to buy my two rolls of toilet paper like everybody else and this man Wayne DeVore who I'd met through FUBAR through Charlie Armstrong he was standing in line two people back so we agreed to share our spot because I knew him and we could at least talk the other people were strangers and
00:43:14 While we were talking, I said, you know, this is a little scary.
00:43:16 I still have some young children.
00:43:19 And I'm 65.
00:43:22 I mean, COVID was killing old people.
00:43:24 All of you old enough to know you felt like you had a target.
00:43:28 Because if you had diabetes or you're old, it was just like, next.
00:43:32 And that was how I felt.
00:43:34 I couldn't leave my family with nothing.
00:43:36 I already knew that I needed to eventually sell this.
00:43:40 So Wayne said, well, I know somebody who would be interested in this.
00:43:44 And I asked him, point blank, I said, well, he has to have money.
00:43:46 I mean, I'm broke.
00:43:48 I'm here.
00:43:48 I can't work.
00:43:50 You know, we got to find somebody that can afford to do it.
00:43:53 I have lots of people that want to go mining, but their impression is you show up, you dig for a few hours, and then you go home and you cash in your 10 ounces of gold.
00:44:01 You know, you get $5,000 a day for breathing, basically.
00:44:05 No, he has money.
00:44:06 So we went to his house.
00:44:08 Let me pause you there.
00:44:10 So Mr. DeVore, he suggested to you that Mr. Kroenke might be someone interested in purchasing the mine.
00:44:17 Did you know Seth Kroenke before that time?
00:44:19 I'd never met him.
00:44:20 Were you familiar with his business even?
00:44:23 Not at all.
00:44:25 And so how many days, if you recall, after you met Mr. DeVore, did you go over and see Mr. Kroenke?
00:44:30 We went that day, that morning.
00:44:32 I mean, he bought his toilet paper, I bought mine, and we drove over to see him.
00:44:37 So tell me about your impressions of Mr. Kroenke when you first met him.
00:44:41 I have good impressions of Mr. Kroenke, even now.
00:44:43 I mean, he's a very good businessman for what he does.
00:44:47 He's got a good crew, they have a good office.
00:44:50 I went to his house.
00:44:51 He's got a beautiful hangar, big boat inside, snow machines in the yard.
00:44:55 I call it the Alaska sportsman paradise.
00:45:00 He has his own runway.
00:45:01 He's got a really nice Stinson Voyager 108 airplane.
00:45:04 We looked at all of that, and I really didn't know what to think except he's clearly a successful Alaskan businessman.
00:45:11 I don't know about outside.
00:45:13 And for me, a person who only wants to go mining, all of that stuff's useful, but I don't have a new airplane.
00:45:19 I drive a 25-year-old car.
00:45:21 My excavators are junk, as they have told you.
00:45:24 I'm more interested in the mining excitement.
00:45:26 So my impression of him was that he's a very squared Away businessman, but not necessarily capable of mining.
00:45:33 I don't know that about anybody.
00:45:35 Any of you could be gold miners.
00:45:37 I wouldn't know until you try it.
00:45:39 Did you sell Mr. Kroenke gold that day?
00:45:42 I had 10 ounces of gold in my car.
00:45:45 In the spring, if you want to buy gold for me, call me because that's when I need money.
00:45:50 We've got to buy all of our fuel and parts in advance.
00:45:53 We've just gone through the winter and it's time to get ready to go.
00:45:57 I had 10 ounces of gold in my car.
00:46:00 I sell it 10 ounces at a time so I don't have to weigh it.
00:46:03 We always know what it is.
00:46:04 I showed it to him.
00:46:05 He wanted to buy that.
00:46:07 But that's not an unusual reaction, but I didn't know him.
00:46:10 Did he pay for it on the spot?
00:46:12 No, we went to his office.
00:46:13 I don't know if he had to go to the bank or what.
00:46:16 We went to his office.
00:46:18 The second time that I met him at his house, probably a week later, he did buy more gold and some silver at his house and paid for that there.
00:46:30 After you met Mr. Kroenke and sold him gold, did you begin discussing with him the possibility of
00:46:36 exploring or testing or even potentially purchasing Dan Creek yeah of course I mean I went to see him because Wayne DeVore told me that this is a guy who could he already built buildings in the bush he had an airplane he knew how to access he could run a crew out there I was looking for someone to come in and and take over and do the mining and it requires that sort of ability did you bring
00:47:01 Mr. Kroenke and his crew out to Dan Creek in April we did it took a little back and forth we looked at some equipment he was getting familiar with me and how mining works Seth had no idea what gold mining was beyond what you know I mean you know he's seen it everybody knows about the panning part
00:47:20 but when you meet somebody who's really a gold miner and they say come on out and visit it's never convenient it took us two weeks or more just to figure out when we could both be out there and Dan Creek still had almost two or three feet of snow on the runways it's by air or you can take a snow machine if you're brave and I said let's just wait till it melts out a little bit so we went out on the 28th of April I went and he came out on the 29th and he flew his airplane with his guys
00:47:48 By then, we were pretty serious about, well, this could be a possibility.
00:47:51 I mean, you might actually mine.
00:47:52 And in my business, if the door opens, you go through it.
00:47:55 You have usually five minutes to decide.
00:47:58 If you're going to get on the airplane and go to the mine, they'll say, well, we're leaving now.
00:48:01 And you either go or you don't.
00:48:03 But it's your choice.
00:48:04 So he came out.
00:48:05 So in my opening, I suggested that fools rushed in.
00:48:13 Can you tell the jury a little bit about why it was important to sort of
00:48:16 solidify a plan by early May in order to be able to mine in 2020.
00:48:21 We have to drive from Wasilla to McCarthy 300 miles, roughly.
00:48:28 And it's heavy equipment.
00:48:29 There's weight restrictions on the road.
00:48:32 You can basically only use pickup trucks.
00:48:34 The McCarthy Road is 50% of axle weight.
00:48:36 You wouldn't know that if you don't drive trucks.
00:48:38 But a truck weighs 40% of its axle weight empty.
00:48:42 So you can only haul 500 pounds on a pickup.
00:48:44 It's terrible.
00:48:46 If you do it legally, well, I won't say that we always did, but I knew that we had to be in McCarthy by the 1st of May.
00:48:51 We are across the Nizina River from McCarthy.
00:48:54 Road ends, you cross the Kennecott River, you cross McCarthy Creek, you drive seven miles, and then you cross the Nizina River.
00:49:01 In the summer, it's one mile across.
00:49:04 It's not all water, but it's the size of the Matanuska River.
00:49:07 So you've seen that.
00:49:09 In order to drive across it, you need to go before the glacier starts to run.
00:49:12 Those melt in June, first, second week of June.
00:49:16 The water turns muddy and it's as deep as this building.
00:49:19 We had to be there with all of our stuff ready to go by at least the last day of May.
00:49:25 All right.
00:49:26 After your visit with Mr. Kroenke and his crew out at Dan Creek, were you communicating with them by text message and by phone?
00:49:36 Yes, I think the first thing Seth actually asked me is if I text and I said no, I don't text How do you text when you're driving?
00:49:44 How do you text when you're doing?
00:49:46 I just don't text But we did text during April and we went and looked at a guy was selling a mining machine and we were having big plans What are we going to do?
00:49:54 I wanted to build a hangar blah blah blah lots of lots of whiskey talk and
00:49:58 and we were texting and that's how we stayed in touch because his phones didn't work he has an AT&T phone system and it's Verizon so we texted I was trying to coordinate with him I could drive and he'd tell me I'm coming I'll be here at such and such a time and we sort of used it the way people do you meet with the text but you do all your business in person or on the phone you call after the visit to Dan Creek do you recall mister Kroenke texting you that he was in or we were in to
00:50:26 Yeah, I came back.
00:50:27 He came out, and we had a nice day.
00:50:29 We walked up the creek.
00:50:30 I went to a place I hadn't been in 30 years.
00:50:32 I mean, you can't get there.
00:50:33 He has a picture of Kevin walking across the snow slide.
00:50:36 There's no road there.
00:50:37 I know they said they built a road there, but it's inaccessible still.
00:50:41 But when we...
00:50:44 did that tip that test that was the 29th they looked at the plants they looked at the equipment they walked up we did the whole valley we came down we had a really nice day I actually found hard rock gold there I didn't know I had it was a phenomenal day I can't tell you just phenomenal
00:51:00 I went back to town on the 1st of May.
00:51:02 I texted him.
00:51:03 We met on the 2nd of May in order to see if we really were going to do this.
00:51:07 But my impression at that time is we were going to do this.
00:51:10 This is two successful Alaskan men.
00:51:13 They're used to running their plant.
00:51:14 You think they're going to hesitate.
00:51:16 No.
00:51:16 No, we were going to do this.
00:51:18 So we met on the 2nd to see how that would work.
00:51:20 And that was the basis of it.
00:51:22 Do you recall
00:51:24 eventually entering into a written agreement with mister cranky I did on the fifth of May we had a meeting one of those meetings that that they record and mmm I mean the jury has and will see exhibit 1 which is the the first agreement but and it speaks for itself but could you describe the to the jury what was your intent by signing that agreement what were you hoping to accomplish we met for several hours I met his crew Kevin and Frank
00:51:52 And when Frank walked in the room, I was ready to sign the agreement.
00:51:55 He and I are the same age.
00:51:56 We have the same background.
00:51:57 We're both crazy about mining gold, but Frank has a day job and a good wife and I don't.
00:52:03 So I said, okay, how would we do it?
00:52:05 Seth typed that agreement up while we were sitting there.
00:52:08 It was basically the notes of what we'd agreed to.
00:52:10 And I know from my background, I've never sold a gold mine before, but you don't really buy one unless you know everything about it or you have it tested.
00:52:19 and I'd been at Dan Creek for 30 years when I bought it I knew everything about it so there was no testing but when to sell it to Seth I told him I can't sell this to you unless we test it or you'll just sue me if you don't find gold you'll say that I lied to you and and that's possible of course there's a saying you know a gold mine is a black hole with a liar in front of it and to oppose that you have to do good testing and there Rutherford their witness he told you that they test constantly
00:52:45 so I told him the only way I could understand that this would work fast enough for my purposes I wanted an exit strategy that year I wanted to be able to stop mining stop with the risk spend time with my kids and he had to come in and take over and that was going to mean high speed if we got him out there soon enough he could test all of May
00:53:07 and he could make up his mind before the before the river came up in June and either go mining or not go mining and that led to this confusing thing about the blue plant I already owned that plant it was already at Dan Creek we didn't have time to bring a new one in they're too big and heavy road restrictions so you see what's happened we have to use all of Randy's equipment and it's not great and Seth's not familiar with that part of it they have really nice equipment but I said I have a plant out there I've never run it I've spent
00:53:36 It was in the bush behind Eureka Lodge.
00:53:39 And then once it's there, I've never been able to use it.
00:53:41 I don't have enough crew and I don't have anyone to fix it.
00:53:44 We're busy running the outfit we have.
00:53:46 So the agreement was they would come out and they would test the ground and that was only possible because Frank Martin had a test plant, already owned it.
00:53:56 And it was a pickup truck style.
00:53:57 You could tow it.
00:53:58 So it was legal to take out there.
00:54:00 He had already used it.
00:54:01 He knew how to use it.
00:54:02 All we needed was a small excavator to put dirt in.
00:54:05 It's very small, like the excavator bucket should be like this big.
00:54:08 And the ones that we do overburden with would take a scoop the size of this desk.
00:54:12 You can't feed a small plant with a gigantic hole.
00:54:15 Mr. Elliott, let me ask you then.
00:54:17 So I want to just address a few parts about Exhibit 1, the original agreement.
00:54:24 At any point did Mr. Elliott or Mr. Clark tell you that
00:54:28 Their anticipation of that first agreement was a time and materials contract.
00:54:32 No, it wasn't like that at all.
00:54:34 Did you at the time understand what a time and materials contract was if they had told you?
00:54:39 I know what they are.
00:54:40 I worked in the construction business in Hawaii.
00:54:42 Two guys were going to share their resources.
00:54:45 He had those trucks and all that stuff in his yard already.
00:54:48 We just had to go put batteries in them and drive them.
00:54:50 And I already had all my equipment out there or we couldn't have done it at all.
00:54:55 And I also want to ask you, Mr. Clark told the jury yesterday that he recorded that meeting on May 5th.
00:55:00 Did you know that you were being recorded?
00:55:01 No, I didn't know they recorded any of them.
00:55:05 I don't record my meetings.
00:55:06 You have to do what you say you do and remember it.
00:55:09 But the agreement, the purpose of that agreement was just to put down exactly what we were going to do.
00:55:14 I didn't anticipate having to ever defend myself because I forgot to add this or that.
00:55:19 The spirit of that agreement was I already had a plant out there.
00:55:23 I already had the ground.
00:55:24 He had a crew and he had enough money to test and then he would bring investors.
00:55:30 That's what it said.
00:55:31 That's what I understood it to say.
00:55:32 And all we had to do was get through 30 days and then he would buy.
00:55:36 That was what I thought.
00:55:38 You mentioned that you expected Mr. Kroenke enough money.
00:55:42 What do you mean by that?
00:55:44 well he told me that his father-in-law and a guy that hunted with him every year from Tennessee or Georgia I don't remember that they would invest if he just told him this is worth investing that they would put the money in now that's pretty pretty reasonable my brothers would put money in too I would never ask them but they would okay so once the agreement is signed on May 5th could you talk about just in broad strokes talk about what it took to mobilize
00:56:11 I left their meeting and I got in one of their dump trucks and I drove all the way to Dan Creek all the way out there we didn't have an extra minute
00:56:23 and then I went back out and met them each time they came to McCarthy with things we loaded them on my equipment and we drove in but my equipment had the marukas they talk about they had bad tracks I had already bought eight brand new tracks it takes five hours to change the tracks and I hadn't done it because it takes five hours so we tried to do the freighting with what was already running we didn't have time to do that maintenance
00:56:45 Well, we paid for it.
00:56:46 We broke tracks in MacArthur.
00:56:47 We broke them in the river.
00:56:48 We had to fix them where we were, and it just slowed everything down.
00:56:52 I hadn't anticipated needing to do so much freighting.
00:56:55 We took at least eight, maybe ten loads over to Dam Creek.
00:56:58 I normally do two, and the expense of doing it and the complexity of keeping it running that many times just about did me in.
00:57:06 I almost didn't get there.
00:57:08 Who from Mr. Kroenke's crew was with you and or assisted you in freighting that equipment and material?
00:57:14 Two people, Travis, well Blake came with Travis, they drove things from McCarthy down to the river.
00:57:20 We loaded them on our trailers or I drove them myself in the river.
00:57:24 The two times I didn't do it, one of my guys drowned my 6x6 truck and he was on his way to meet a guy named Nate, Nate, I don't know his last name, who was bringing in a maruka with fuel in that red thing you saw.
00:57:37 That picture they have was the next morning when we went to rescue that machine.
00:57:42 And so I sent one of my guys to meet him to show him how to get there and my guy drove in the river and drowned my truck and that guy drove in the river and got stuck and I woke up in the morning with a hundred thousand dollars worth of damage and all that all that effort to go get all that I'm gonna take a little sidestep here.
00:57:59 So Obviously during the course of this trial the jury's heard a lot about the detailed records that mr Kroenke and his company maintained Could you tell the jury a little bit about how you keep records?
00:58:10 The only thing that matters is the gold
00:58:12 clearly nobody cares how much fuel they use or how many frozen burritos they ate who cares I have a little ledger in my house every day I clean the gold I write down how much we got in grams and we have percentage agreements none of these people work for me so if we dig up the gold if it's you you get 2% so how do they know what the 2% is I write down what I get every single day and of course I could lie and steal from them but they always have less than
00:58:43 I only give the crew 20% normally, and this little book becomes what we live by, and it is still out there.
00:58:51 I mean, I have the one that we use for my stuff.
00:58:55 I want to also ask you, at least in 2020, could you tell the jury what type of equipment, materials, and facilities you have had on, not have, had on site in 2020 when Travis showed up?
00:59:12 Well, there's a lot of accumulation.
00:59:14 I would suspect if I showed you pictures of it, you'd all say, wow, that's ready for the landfill.
00:59:19 But we save everything.
00:59:21 If you break something and you need it, we save everything.
00:59:23 So there's a lot of dead equipment sitting around lots, 39 excavators, for example.
00:59:27 But at the time that they showed up, we had seven excavators that were running.
00:59:32 I had four gold plants, but only one that we used.
00:59:35 They have various capabilities, and you take the one that's working.
00:59:41 We had all the support equipment, four welders, I don't know, pumps.
00:59:46 But the big flaw that I had in 2020 is there were two aspects of it we couldn't duplicate.
00:59:52 We were using water from two mile long aluminum water lines that I had brought up through the years and we'd established to feed water to the wash plants.
01:00:01 And so I only had one, I only had one six inch pump.
01:00:05 www.sethkroenke.com
01:00:23 that we anticipated running were running off a single 8-inch water line and I didn't anticipate them moving out.
01:00:31 The initial testing was only for four acres.
01:00:34 I knew what was already there.
01:00:35 I'd been there before.
01:00:36 We'd mined all the way around it.
01:00:38 We only talked about four acres.
01:00:40 My intention was to develop Seth Kroenke into a successful gold miner and then he could buy the rest of the property.
01:00:47 He would know enough about it by the following October
01:00:50 that this is how it's done, this is what the gold is like, and since I already knew what he was going to recover there, I was positive that he would say yes.
01:00:58 It's about 800 ounces, maybe 900 ounces per acre, and there were four acres there for sure.
01:01:03 I mean, you never get this in Placer.
01:01:05 You never know for sure.
01:01:08 I want to go back, and one of the things that's in Exhibit 1 is there's a reference in there that
01:01:15 It is commonly agreed that supplying this agreement will in no way infringe upon the operation that is ongoing with Charlie, Kelly, and Crew.
01:01:23 Could you tell the jury who is Charlie, Kelly, and Crew?
01:01:27 They are the people that Wayne DeVore knew.
01:01:30 We had that in common, and they had introduced me to him.
01:01:33 He operates a construction mechanical repair business called FUBAR.
01:01:38 That's Charlie Armstrong.
01:01:39 His wife is Raquel.
01:01:40 She changed her name to Luna.
01:01:42 Go figure.
01:01:43 But anyway, they...
01:01:46 I hired Charlie Armstrong the year before to come out and repair everything I mean everything needs to be repaired so he worked for me for 30 days I paid him every day in gold that's what he wanted
01:01:59 And then they went away.
01:02:00 They came back in August.
01:02:01 I had another contractor who decided they would make more money in Wasilla, and they left.
01:02:05 They left end of July, and here I am.
01:02:07 My income is a percentage of what they dig up.
01:02:10 So if they don't dig it up, no income.
01:02:12 So I needed somebody.
01:02:13 And just so it's clear for the jury, you're talking about the 2019 mining season?
01:02:17 19th season.
01:02:18 And then Charlie's wife, Luna, came out with her brother, and they mined for, I don't know, five or six weeks, starting on August 1st.
01:02:26 They were done mid-September, maybe the end of September.
01:02:29 unfortunately because of the shuffle step with contractors I had a bad year so when I showed up in March and had to sleep in my car I mean I had enough money to go mining but I didn't have any extra okay so in 2020 what was your arrangement with the the Charlie Kelly and crew also known as FUBAR at the end of the 2019 season we are talking October
01:02:55 Charlie and I went out on the river and I had sold some property to the neighbor and there was a stake out in the middle of the river and I wanted to know because we'd been finding gold farther and farther into the center of the stream and it was unexpected
01:03:07 I said well let's go all the way to my farthest corner and let's dig a hole and let's see if it pays there because if it pays there and it pays here the gold is always on the bottom all down the river that solves the problem I'll know exactly how far it pays and we'll dig a stripe across the bottom this is this is known as a trench test across the bottom of my property line the neighbor I can't dig on his property anymore
01:03:33 and we'll find out where the channel is there's a deep spot where the most of the gold is so we started in 2019 and for two weeks with those big excavators we dug a hole we had permission to stack the material on the neighbor's yard this is a problem what do you do with the stuff you're taking away and we dug a hole when we got to the very bottom bingo it paid all the way down on the corner so we stripped
01:03:54 And by the time Seth got out there, they had a big hole dug there, 70 feet wide and probably 500 feet long, all the way across the creek, but we hadn't mined it yet.
01:04:05 But I told them if they would help me do the test digging in, the next year they could mine that.
01:04:10 so the Kelly and Charlie and Armstrong and FUBAR so they were out there already they were adamant they were gonna mine that whole stripe it's a lot of work but so what was your my question to you was what was your arrangement with them for the 2020 season they took 20% I kept 80% I provided everything except for their housing and food so you kept 80% of the gold they recovered and they got to keep 20% and they had to maintain what they used what did you provide them in exchange for the 80%
01:04:38 All their fuel, each excavator, no matter how decrepit they look in the video, are $60,000 with shipping, every single one.
01:04:46 I provided them with four of those.
01:04:48 They had two Cabelcos and two big ones.
01:04:52 I provided the Marucas.
01:04:53 Those are $40,000 each to move the material.
01:04:56 I had a rock truck, which they destroyed the first week, unfortunately.
01:05:00 That was $60,000, and it was out there already with rope rolling.
01:05:04 And they got the pumps, they got the welders, they got the shed with all the tools in it and spare parts.
01:05:11 And we're talking about 10 years of me investing everything I have.
01:05:14 So there was a lot of stuff laying on the ground there.
01:05:17 I can't really put my finger on it, but we valued that at the time at half a million dollars.
01:05:22 That's what that was worth.
01:05:25 It goes without saying, but I will ask you, you also provided them access and opportunity to mine.
01:05:29 Of course.
01:05:31 They were driving their food and their things in when Seth showed up.
01:05:37 They also drove Seth's stuff in because the deal was they had to do whatever I said and we were going to mine that strip.
01:05:43 I guaranteed them they would get the opportunity to mine it.
01:05:46 I estimated that they would get 500 or 600 ounces.
01:05:49 It's a fortune for people that work for wages.
01:05:52 It's a fortune.
01:05:54 Just so it's clear to the jury, did you have a written contract with Charlie and Kelly and crew in the 2020 season?
01:06:00 When they worked for me originally, I paid him by the day.
01:06:03 When they came back in the fall, it was in the form of a bucket trip.
01:06:07 We're going on vacation but we're going to work.
01:06:09 and after I'd worked with them for two and a half months and they helped me do the stripe I knew that they could do it I knew that they were solid they didn't have any equipment experience but I trusted them to be able to maintain the equipment Charlie was a good mechanic and they really wanted this opportunity but they didn't need to figure out whether I was really there and if it was real I couldn't mine it by myself I needed them and they needed me
01:06:32 With the arrangement you had with the FUBAR crew in 2020, are you paying them as you go, every week, every month, or do you settle up at the end of the season?
01:06:41 They're supposed to wait till the end of the season, but we're humans.
01:06:44 If they came up to me and they wanted to settle, we'd pull out the book, I would add up how many ounces we'd found today, and I gave them their 20%.
01:06:52 And that happened probably four or five times during that season.
01:06:57 All right, I want to shift back to Seth Kroenke and his crew.
01:07:01 What were your expectations pursuant to the first agreement, Exhibit 1, that Mr. Kroenke was going to provide other qualified persons needed for the testing?
01:07:10 I didn't know about his other crew.
01:07:12 I met Frank.
01:07:14 I met Kevin.
01:07:16 I met Seth.
01:07:17 And I hadn't even met really Travis.
01:07:20 I didn't know Travis.
01:07:21 But another friend of mine there grew up with him, so he vouched for him.
01:07:24 And I will say they're first class.
01:07:27 I mean, Travis is an artist, one of the finest fabricators you'll ever meet.
01:07:31 Kevin's a very good manager excessively easy to work with very very good Seth's not an uneasy hard person to work with he and I have the same personality that's not a good thing where we are but I didn't know that then so I have nothing bad to say about them I was impressed with that I don't know who the other people were but Seth represented to me that he has a whole crew that this core group are the ones that
01:07:53 who actually run everything else.
01:07:55 And I think that's true.
01:07:56 You can see that today.
01:07:57 They had one other guy though that I met in their yard, a mechanic named John Weldon.
01:08:02 I told them that we needed a complete team Armstrong could probably fill in but he was pretty busy with the junk already and running two sets of junk would be pretty hard that was the reason they bought a new SANI excavator so we wouldn't have to fix it and they could feed the test plant the initial program wasn't at least for me you can't make money with a little tiny thing five five or ten yards a day it doesn't pay a hundred yards a day is what we were running and it pays two to five ounces but if you take one tenth of that that's not money
01:08:33 I couldn't even pay Frank's wages but he knew how to use it that was the key and they they decided to buy that little Sani at the time that we made this agreement they were going to bring a new one all right so you've described a little bit about the crew you heard Travis Turnbull testify yesterday about the length of time that it took him to get that blue plant operating I want you to sort of touch on that and what your observations were about mr. Turnbull's ability to succeed to get that thing running consistently during the summer
01:09:03 I think he was surprised at how bad it was, the machine.
01:09:08 And when I bought it, I bought it from another gold miner.
01:09:10 I never used it before.
01:09:11 And I told them that in the meeting.
01:09:13 But I also said I thought it would probably run in two days.
01:09:15 Now that's an optimistic gold miner.
01:09:17 Everything's going to run in two days.
01:09:19 And of course it didn't.
01:09:20 What we did was we got out there and we started to work on it and then we realized it was fairly lightly built.
01:09:26 But the reason I didn't actually care about that is we could have returned all of our money in five or six days of maybe eight or ten hours of actually mining.
01:09:34 It's really profitable.
01:09:36 But you have to get those five or six days.
01:09:38 As we started to try it out, it had a centrifuge on it, and I knew the inventor of the centrifuge from Mary's Valley.
01:09:45 I worked with him in Canada 30 years ago.
01:09:47 And he told me long ago, if you have ground that's marginal for a regular screen deck, but you have a centrifuge,
01:09:54 You're going to recover the fine gold and probably turn it around.
01:09:57 You'll make money.
01:09:58 And I worked with him in Costa Rica one winter, and it works.
01:10:01 Those things really work.
01:10:02 So I bought this plant used.
01:10:04 I don't know who built the centrifuge.
01:10:05 We got it out there.
01:10:06 It was fairly worn out, but I only anticipated it running maybe a week or two weeks.
01:10:11 We'd have our 75 ounces of gold, and we'd be good.
01:10:16 I told him in the first meeting it's going to be about $100,000.
01:10:18 That's 100% mobilization.
01:10:21 It's not actually buying very much.
01:10:24 All right, so you've described the mobilization.
01:10:27 You've described Mr. Turnbell's efforts to get the blue plant running.
01:10:32 You've also heard the testimony of all the witnesses.
01:10:34 So do you recall a time when the blue plant was set up and running and the RASC crew started mining down at the lower part of the creek?
01:10:42 They put that – we had to build a big pad for it, and FUBAR did that for them.
01:10:47 They dragged that plant down on the 14th of June.
01:10:49 I have a picture of it.
01:10:51 and fired it up the water was wrong this was wrong wasn't enough water into it manifolds were wrong this is pretty normal on the 17th 16th or 17th of June we actually started running the blue plant with with the intention of getting gold out of it there were discussions about the sluice boxes underneath Travis fabricated one of the nicest ones an under box I've ever seen and the first I think it was the first or second day we got five ounces of gold with that
01:11:18 Out of the ground that Frank had tested and now we took a big excavator and we dug farther down and he said they were in the big gold
01:11:25 and it returned 17 or 18 ounces in the next two or three days but it was stutter step it would start and break something run for three hours and break something and then of course there was another thing going on which affects everything the Sani excavator didn't run when I picked it up on the river I had to disconnect the batteries and re-energize it to get it to even start there was something wrong with it and that was their main production machine so during the test that they did with Frank's machine they used one of my old beat-up junk Cabalco 200s
01:11:54 Because the Sani never worked.
01:11:55 It just never really ran dependably.
01:11:57 And they were supposed to feed the blue plant with the Sani.
01:12:00 Well, they couldn't.
01:12:00 So then they had to get my Cabelco over there.
01:12:02 I have two of them.
01:12:04 And then the Cabelcos would have some problem.
01:12:06 I mean, not major, but just this or that, this or that.
01:12:09 And then the plant would break.
01:12:10 So it took them until the end of June, the 29th of June, to actually put in two full days and probably three or four half days
01:12:18 And by now, we don't have our 75 ounces.
01:12:20 We have 17.
01:12:21 But of course, I have until the middle of October.
01:12:24 I'm not panicked.
01:12:24 I mean, we don't know until the end.
01:12:27 And I said, okay, we got a lot of teething problems here, but this plant looks like it'll actually work.
01:12:31 But I couldn't figure out if the centrifuge is working until we ran it for five days.
01:12:36 I had a lot of money and I didn't want to just throw that away without trying.
01:12:40 But the centrifuge ended up taking a lot of maintenance and unknown maintenance to me.
01:12:45 I've never owned one before.
01:12:47 That's a problem with not knowing what you're doing.
01:12:48 It's expensive.
01:12:50 Mr. Elliott, I'm going to pause here, Your Honor.
01:12:51 May I approach and display Exhibits B and then later C to the jury?
01:12:55 Yes.
01:13:04 Mr. Elliott, I'm going to show you what we've marked and introduced as Exhibits C. I'm sorry, B isn't Bravo.
01:13:38 Okay, I'm gonna, I'm gonna, it's a 20, Exhibit B is a 21 second video.
01:13:43 I'm gonna run through it once and then I'm gonna go back and then have you describe it, okay?
01:13:48 So we'll just play it first for the jury.
01:14:12 Okay, what did the jury just see?
01:14:15 Okay, so the water you're looking at right now, if you can imagine, that was surfaced the year before.
01:14:22 This aluminum line, it's parallel to the groove or the test that FUBAR was doing.
01:14:29 And their excavator is the Orange Hitachi that's deeper in the hole.
01:14:32 They've been there digging a little longer.
01:14:34 The yellow excavator belongs to Kroenke's outfit.
01:14:38 It's a CAT 336.
01:14:40 The red and white one is managing the river.
01:14:43 Remember, the river is running right next to us.
01:14:45 We're 20 feet below grade.
01:14:47 If the river cuts through the bank and starts into that hole, it's going to drown everything that you see and it's going to cut a big hole.
01:14:54 So what we do is we stack all of our rocks along the edge.
01:14:57 The river can cut through the bank and it can fill the hole with water, but it doesn't bring gravel with it because if it starts bringing gravel, we're going to have to re-excavate every single inch of it
01:15:07 Before we can go back to mining again.
01:15:09 Water we can pump out, although I would lose my pump and maybe one of those excavators.
01:15:13 And when Frank was testing before this picture, he was down in that groove with his equipment, but it was May.
01:15:19 Dan Creek starts flooding in June through the end of September.
01:15:23 Now we're into, this is probably the 16th, 17th of June, and the flood is imminent and it's dangerous.
01:15:31 that is that trench they keep talking about Frank happened to do it was a safety device I wouldn't let him mind on there unless we did it it was just so risky I've seen it flood before in 15 minutes the creek cuts a hole it's a big river and it takes a million yards of gravel in about 15 minutes and your equipment's buried that means just buried right up to the top and gravel you can't you can't salvage it I was afraid of that I'm gonna move through a little bit further so you can describe show the jury what you just described stop there
01:16:02 Okay, so that's a 50-ton excavator that weighs a hundred and eight thousand pounds It's stacking those big rocks and you can see the creek is right over that bank.
01:16:10 It's running effective point The creek is running right here and it's at this level And that's all that's holding it back that little tiny dice of gravel and it's fragile when there's a flood it rises to the top it cuts a groove and fills that in and that's happened twice since 2020
01:16:27 I'm doing a device here that it builds big rocks all the way up to here so when it cuts through the bank it brings a few yards of gravel but this takes all the energy so that it can't erode and that's all that's for those are buried now you can't see them any longer this is a lot of work and I have to leave a machine right there all the time they would drive all the rocks from over here they would drive all the way around and dump them right where I could reach them and I would restack as they went up we have a pump running right here you can hear it
01:16:54 He's pumping water out of this hole, up this water line, and it's going to one of the two plants.
01:16:59 I think RAS was on the aluminum line, and this is the pump running the second plant.
01:17:04 That we had to do in order to keep the water out of the pit, but that we had to do because we didn't have the capability to run both plants on a separate pump.
01:17:13 And the plants are not down in this hole.
01:17:15 You'll see that sometimes they say, just put them down in the hole, because that creek can come in from now until we're done in October.
01:17:21 Anytime it can break in.
01:17:25 3 seconds on exhibit B. I'll keep playing.
01:17:32 Okay, so that's one of their dump trucks.
01:17:35 Whose dump trucks?
01:17:35 RAS dump trucks.
01:17:37 We drove those in.
01:17:38 That might have been the one I drove from Wasilla to the mine.
01:17:41 That's an exciting trip.
01:17:43 300 miles on the road and then, wow, the last 10 miles.
01:17:47 So I stopped exhibit B at 7 seconds.
01:17:48 I'm going to keep playing.
01:17:53 Okay, I stopped here at 10 seconds.
01:17:55 Describe for the jury what they're looking at.
01:17:57 So we had a test program here.
01:17:59 Frank stripped off his gray gravel.
01:18:01 And then he started testing down this side and down this side.
01:18:04 You see the little trench there.
01:18:06 And they ran that.
01:18:07 His little plant was here.
01:18:08 They ran all that gravel to see if there was any gold in it.
01:18:10 And you could have knocked me over with a feather.
01:18:12 It pays from there all the way down.
01:18:14 And normally it pays right here, just the bottom 18 inches.
01:18:18 But there was a reason for that.
01:18:19 Something odd happened on this piece of property.
01:18:21 There was old hydraulic tailings.
01:18:22 And that's what we were mining.
01:18:24 But when he got down to the bottom where these big rocks are,
01:18:27 Remember now, this is a 90,000 pound machine.
01:18:29 These rocks are the size of this table.
01:18:32 There's no little rocks in the picture here.
01:18:34 He's digging them out.
01:18:35 As he digs them out, he's got to get rid of them.
01:18:37 So he would put them here, and then I would place them here.
01:18:41 But the two machines have to stay where they are.
01:18:42 This one could, but you can't track around on this ground.
01:18:46 Even with good track, you can break them.
01:18:48 So Frank would load the truck.
01:18:50 That's their pay gravel.
01:18:51 Put the big rocks here.
01:18:52 They would back up this hill.
01:18:55 and about 200 yards and dumps the truck and then another excavator picks it up and puts it in the plant and then another excavator takes the tails and loads them in that truck and they drive up and they dump them into the runway fill or wherever we're going to put those.
01:19:08 At the end of this project this entire area is completely excavated and it has to stay open and out because we don't know whether there's undulations or a deeper channel until we're done.
01:19:21 You just don't know.
01:19:23 This year, the agreement with contract with Kelly and crew was to dig out that strip so I would know where the channel was.
01:19:30 And I didn't know Seth when I made the agreement with them.
01:19:33 And our agreement is subject to that because I told him, I'm not going to sell it to you and let you take their place.
01:19:40 They worked last fall and they deserve the chance to get paid for it.
01:19:43 They didn't get paid for the stripping work from the previous fall.
01:19:46 You only get paid when you find gold.
01:19:49 I couldn't afford to pay them for the work.
01:19:51 So I kept their place open, and I promised them, you will get to come back and mine it, and they did.
01:19:55 They actually did it.
01:19:56 All right, I'm going to keep pointing.
01:20:04 Right there?
01:20:05 Can I stop now?
01:20:06 It's 17 seconds.
01:20:07 What is shown in this photo?
01:20:09 This is a Calais crew.
01:20:11 They've got a 450.
01:20:12 They've got a 200 excavator.
01:20:15 We're using the track Marucas.
01:20:16 They come down here.
01:20:18 She loads the same stuff.
01:20:19 See the big rocks?
01:20:20 In the maruka, he backs up and dumps right there, and this excavator puts it in there, and then they load their tails into this dump truck.
01:20:26 They drive them off and do other things.
01:20:28 This is the RAS, that's the big blue screen.
01:20:33 That's my 200 Cabalco feeding it in the same situation.
01:20:37 They dump it, and then the tails have to be driven away.
01:20:39 They did use their dump trucks.
01:20:40 I had my own, but they're not really good, and we didn't have time to do both plants.
01:20:47 That is the entire thing.
01:20:48 But if you count, there's one, two, three, four, five, and there's a Volvo you didn't see.
01:20:54 There are already six excavators involved here.
01:20:57 You can't take this excavator and drive up here and work and then drive back down again.
01:21:01 And you can't safely run that plant down in this hole because of the flood.
01:21:05 And you can't really get water to it without pumping.
01:21:09 It's not hard, but it's complicated to do that.
01:21:12 We have to put all these where they don't drive at all or they'll drive over them and smash them.
01:21:16 So this has to be under culverts.
01:21:17 It's got to come up at the plant at the right place.
01:21:19 You have to manage the water on the other end or it'll run back down in the hole, and you'll never pump it out.
01:21:25 And all of that is the site planning, and you have to be there to do that.
01:21:29 It changes daily.
01:21:30 You can see already that as they dig this groove back, the amount of water down in there is going to be bigger and bigger.
01:21:36 So you have to anticipate that.
01:21:39 If something happened from the creek and it filled that up, we'd never be able to pump it out.
01:21:43 It'd be a million gallons of water in 15 seconds.
01:21:46 This is what happens.
01:21:48 I've seen it flood.
01:21:49 Nobody else had.
01:21:50 Seth Kroenke, nobody else had seen that.
01:21:52 As soon as they suggest that they're going to mine down in that hole, I just want to take them all and put them on the plane and say, just go.
01:22:00 I just don't want to see that happen again.
01:22:02 It's happened to me, and I don't want to see it again.
01:22:05 But the complexity of doing this, it's super simple.
01:22:08 All of you have looked at the elements here.
01:22:10 You could definitely do this.
01:22:12 But knowing what's going to happen next is what's wrong.
01:22:15 And then the idea that at the end of the day, after all that effort that you see there, they might have only recovered a thousand dollars.
01:22:21 How would we pay for all that?
01:22:23 It's the opportunity to make a million dollars, but it's gambling.
01:22:29 There's no other word for it.
01:22:30 It's gambling.
01:22:38 Okay, now I'm going to show you what we've marked as Exhibit C. Okay.
01:22:49 What is Exhibit C?
01:22:51 This is a drone video.
01:22:53 Who took the drone video?
01:22:55 My oldest boy is a drone man.
01:22:56 It's probably him.
01:22:59 Just to orient the jury, what direction are we looking at?
01:23:03 What are we looking at?
01:23:04 We're looking north.
01:23:06 McCarthy is to the west.
01:23:08 East is Canada.
01:23:10 South is Cordoba, Valdez.
01:23:13 And those pictures that you just saw were taken right here.
01:23:17 This is a Volvo excavator.
01:23:18 He's managing the pump and taking care of the... There's a flood problem here because I don't own this property, so we have to guard our corner.
01:23:26 So I was standing next to the Volvo looking down into this pit.
01:23:30 So they're driving the trucks down in there.
01:23:32 Then they back up.
01:23:33 They dump on the ground here, what we call a mosh pit, add a little bit of water to it, and this excavator puts it into the plant.
01:23:40 This is the blue plant.
01:23:41 It comes off, the tails come off here, and they go into these two holes.
01:23:44 We've already mined this, so now we can use it for retaining ponds and our fine material.
01:23:49 We don't have to haul the fine material away, but we do have to haul all the coarse tails.
01:23:53 And they have to go somewhere, so they're going here.
01:23:56 They're dumping them over the edge here.
01:23:57 I'm building a runway.
01:23:58 That runway was 900 feet.
01:24:00 Now it's 2300 feet long.
01:24:03 So it's been a lot of tails.
01:24:05 As they mine the gravel out of here, they wash it there.
01:24:08 As he mined the gravel, they brought it up and they washed it here.
01:24:10 This is completely filled now.
01:24:12 And they built the runway out.
01:24:13 And now they're having a problem.
01:24:15 They've got to put the tails somewhere.
01:24:16 And it's a big project, a big process.
01:24:18 This is some of the Fuwar, the Ras plant was right here.
01:24:21 Their campground was right here.
01:24:27 I'm going to make a record, so Mr. Elliott, what you described is that the Fubar Cruz camp is in the middle of Exhibit C. We stopped at two seconds.
01:24:36 And RAS is right next to him right here.
01:24:38 Okay.
01:24:39 All right.
01:24:39 I'm going to just play through this, and then I'm going to stop it in a moment.
01:24:46 So this drone video, do you know what date it was?
01:24:54 late June mid 17 20th of June somewhere in there all right I'm going to stop this now at 17 seconds and could you orient the jury to what they're looking at so you recognize the three excavators except there's a change here yeah these are the three excavators you saw that's their cat you saw the cat digging the yellow one this is the red and white one on top of the rock pile
01:25:17 This is the 450y you saw backing up, and the maruka comes down here.
01:25:21 You didn't see this one because I was standing here.
01:25:23 There's the pump that you could hear running.
01:25:26 That was the diesel.
01:25:27 Look where the creek is.
01:25:29 It's right above us.
01:25:30 It's right on the other side of that, and it is right there.
01:25:33 When this is going, this creek, it goes through the trees and over here.
01:25:36 I mean, it does a lot of damage.
01:25:37 It's a big thing.
01:25:38 I'm emphasizing that because there's a whole lot of focus on this trench, and here's the trench full of rocks.
01:25:45 It went down to there.
01:25:46 But this was vulnerable.
01:25:47 I was really, really worried about this.
01:25:49 We had to get this done.
01:25:50 That is the weakest point.
01:25:53 But it didn't.
01:25:54 It stayed down.
01:25:55 We got it done.
01:25:56 I filled that all the way up.
01:25:58 The rafts mining on the blue plant all took place here, right in here.
01:26:05 And the FUBAR crew, they went this way all summer long.
01:26:09 And they eventually reached here.
01:26:14 So Mr. Elliott, the jury's heard a lot of testimony about the suggestion that you prevented the RASC crew from mining on, as we look at Exhibit C, the right side of that trench, which is sort of a triangle.
01:26:38 And so just again,
01:26:40 The FUBAR crew, were they mining the left side of that?
01:26:43 They only went this direction away from the creek all summer long.
01:26:46 They went this way.
01:26:48 But Mr. Kroenke and his witnesses have testified that you put the FUBAR crew on the right side of that trench during the summer of 2020.
01:26:56 We never did anything they did.
01:26:58 It was still there in the fall.
01:26:59 We never went where the cat is or the red and white one on the rock pile.
01:27:02 We never mined in there again.
01:27:03 They were busy all the way up this way.
01:27:07 So you said they mined that trench on the entire 2020 season?
01:27:11 They reached the end of it in late September.
01:27:16 The jury has been told by multiple witnesses that you told Mr. Kroenke's crew that they could not mine in that trench on the right side of Exhibit C. No, that's not what happened.
01:27:25 What happened?
01:27:26 The blue plant was broken.
01:27:28 They couldn't mine.
01:27:29 There's no reason to keep your equipment down in there if the processing plant is broken.
01:27:35 And then they decided to go testing up the canyon on about first week, second week of July, maybe July 10th.
01:27:42 And they took that CAD excavator with them.
01:27:45 They needed it to open the road.
01:27:46 They needed it to strip.
01:27:48 They needed it to whatever work they had to do.
01:27:50 So there was no excavator for them to even mine with in that groove.
01:27:54 And I'd already obligated my big excavators to the FUBAR.
01:27:58 Okay.
01:27:59 I want to move to another topic.
01:28:01 That went off.
01:28:02 Is that supposed to be?
01:28:03 That's fine.
01:28:03 We're going to come right back up.
01:28:05 I want to go to, and we're a little out of sequence, but you were just testifying about mining operations that occurred with the RASC crew in June 2020, right?
01:28:12 June, yeah.
01:28:13 Prior to that, I want to ask you about the meeting that you had on June 6th with Mr. Clark and Mr. Kroenke.
01:28:20 June 6th or May 5th?
01:28:22 No, the second meeting where you signed the second agreement.
01:28:24 Right.
01:28:26 What was your thought process as you were meeting with Mr. Kroenke on June 6th?
01:28:32 It started on May 30th, the whole process.
01:28:36 We met on the creek.
01:28:37 We'd done the testing on this part, and I expected Mr. Kroenke to say, okay, we found eight ounces of gold out of a little tiny plant.
01:28:45 Your crew's mining, and I told them they're already making two or three ounces a day with the 450 and what the FUBAR was doing.
01:28:52 So you can see where you would be if you mine 100 days.
01:28:55 You're going to have 200, 300 ounces of gold.
01:28:57 Do you want to buy it?
01:29:00 And I expected him to say yes.
01:29:01 He already told me that he had investors ready to go the minute he said something.
01:29:05 And he said, no, I can't do it.
01:29:08 I don't have enough information.
01:29:10 What do you mean?
01:29:11 What more information are you ever going to get?
01:29:13 You never can go to a place that's in operation and watch them mine, and you can't test right next to them so you know for sure it's real.
01:29:21 That's impossible.
01:29:21 But he didn't know that.
01:29:22 I forgive him for not knowing.
01:29:24 He's never done it before.
01:29:26 So we didn't get an investor.
01:29:28 What we got...
01:29:30 5 minutes later was, well, you know, it's COVID and my cash flow is really bad.
01:29:34 You have to guarantee me that I'm not going to lose any money this year out here.
01:29:38 Well, we're only talking about a test here.
01:29:40 I already had $50,000 invested.
01:29:42 How am I going to guarantee that unless we mine?
01:29:44 There's no paychecks.
01:29:47 And he had to run that blue plant.
01:29:48 If he didn't run that blue plant, I was going to lose my total investment of all that stuff you saw broken in the river.
01:29:53 I was going to lose all that because the FUBAR arrangement was already made.
01:29:57 They were already mining.
01:29:58 I couldn't make any more money out of their operation than they were making.
01:30:02 And of course, I didn't know what they would find, FUBAR.
01:30:05 I wasn't sure I was going to pay my own bills.
01:30:07 But I said, if you will go mining, I guarantee you won't lose, but you have to go mining.
01:30:12 Now we're fully committed.
01:30:13 We have to have the blue plant.
01:30:15 We have to have it fixed.
01:30:16 And that was the basis of the June 6th meeting with the changes.
01:30:19 Or I would have just given up on this, but I couldn't.
01:30:22 I was over the barrel.
01:30:24 Again, did you know on June 6th that you were being recorded by Mr. Clark or Mr. Kroenke?
01:30:28 I didn't know at any of the meetings ever.
01:30:33 There were changes to the agreement between the first and the second.
01:30:40 I want to, if you have it in front of you, I think you do, in the first smaller binder.
01:30:44 Would you please open Exhibit 2?
01:30:48 1 of 1, page 2.
01:30:48 Do you see that?
01:30:51 Yes.
01:30:52 Okay.
01:30:53 Is Exhibit 2, is that the second agreement you signed?
01:30:55 It is.
01:30:55 All right.
01:30:56 I want you to go to Exhibit 1.
01:31:01 In the title, which is in bold, do you see where it says, in agreement,
01:31:07 between the parties managing member Treasure chest LLC and Seth Kroenke for the evaluation of the Dan Creek placer mine property the evaluation of okay so in the first agreement the title is it's an agreement for the evaluation right now turn to exhibit two please and look at the same section it says an agreement between treasure chest LLC and Randy Elliott managing member of treasure chest LLC and Seth Kroenke for the evaluation of the development
01:31:36 So it sounds like the words of the development were added to the second agreement.
01:31:40 Right.
01:31:40 Evaluation of the development of Dan Creek placer mine.
01:31:43 What did that mean?
01:31:44 When Mr. Kroenke added that language to the agreement of the development, what did that mean to you when you signed it?
01:31:50 He intended to participate in making it more productive.
01:31:55 Okay.
01:31:55 You just described to the jury the things that are necessary on a day-to-day basis
01:31:59 like dykes, like roads, like all the things that you just described to the jury.
01:32:03 Is that what you thought that he was going to participate in, that development?
01:32:06 Yes, of course.
01:32:07 We couldn't mine more ground unless we put in roads, unless we bought pumps, and we did all of that.
01:32:12 Well, Mr. Kroenke and his witnesses have said that they spent 75% or 80% of their time in May and June working on things that only benefited you.
01:32:19 Well, they benefited him too.
01:32:20 How?
01:32:21 He could get there to do it.
01:32:29 Was there a time when you learned that Mr. Kroenke and Mr. Clark were recording your meetings?
01:32:33 It was later.
01:32:34 It was in July.
01:32:37 By then, it was obvious he either needed more money from me or something had to change.
01:32:44 Okay.
01:32:45 Have you listened to the recorded meeting from June 6, 2020?
01:32:49 Yes, I have.
01:32:50 Okay.
01:32:51 And do you recall Mr. Kroenke telling you that the spirit of the agreement
01:32:59 That is, the June 6th agreement was a time and material contract.
01:33:03 No.
01:33:04 Your Honor, I'd like to publish and play Exhibit I for the jury now.
01:33:08 In which portion?
01:33:09 Oh, let me get that.
01:33:11 It's 1137 to 1203.
01:33:13 Based on my earlier ruling, that will be allowed.
01:33:15 Thank you.
01:33:37 Can we take a break?
01:33:38 I've got a technical issue.
01:33:40 Sure.
01:33:42 Ladies and gentlemen, we'll give you a brief recess.
01:33:44 We've been going an hour or so anyway, so everybody stretch, get some coffee, and we'll sort this out.